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Royal College of Nursing says house prices have spiralled beyond reach for its members

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Written by: Liz Bury
18/06/2021
Many nurses are priced out of the booming housing market even with the First Homes scheme discount
Royal College of Nursing says house prices have spiralled beyond reach for its members

Research by the Royal College of Nursing has shown that house price increases outpaced its members’ wage growth by six times over the past decade, leaving many nurses unable even to take advantage of the discounted First Homes schemes.

The average pay of a nurse with seven years’ experience has risen by nine per cent to £30,165 over the past decade, while house prices rocketed 55 per cent to £256,400.

With additional income from working anti-social hours, extra shifts and on-call payments, the total average yearly pay of a nurse can rise to around £35,340.

The RCN said: “The government launched the First Homes scheme offering discounted houses to some buyers this month, but the majority of nursing staff won’t benefit because their pay has fallen so far behind prices.”

Phill Green, founder at Trufe Money, and former mortgage manager and head of telephone banking at Lloyds, runs a firm which specialises in advising NHS workers and teachers.

“Affordability is based on household income, level of debt, employment type and credit worthiness. NHS workers and teachers are a good lend for banks, probably even slightly better now because their income status is solid,” Green said.

“But there’s no special rate for them. To my knowledge, no bank is doing an NHS special deal,” he said.

The firm offers a 50 per cent discount on its fee for NHS workers — “to say thank you,” — and also aims to support clients by matching unsociable working hours. “We go out of our way to be flexible, and we take as much as possible off their pad, in terms of sorting out their mortgage,” Green said.

Mark Robinson, founder and managing director, Albion Forest, NHS Mortgage Advice, and Teacher Mortgages, regularly advises newly qualified teachers, as well as NHS workers.

“Affordability is definitely an issue. Most lenders are talking about four-and-a-half-times income, whereas realistically, their income is going to increase year-on-year,” Robinson said.

Over five years, a newly qualified teacher’s salary will usually rise by £5,000 to £10,000.

“Kensington Mortgages do let them borrow five times’ salary, but I don’t know of any others,” Robinson added.

As part of the research by RCN, nurses were asked about their experience of buying home.

In one case, Carmel, a registered nurse based in Liverpool, met with a local broker hoping to discover more about shared ownership.

“I contacted a mortgage broker and he may as well have laughed in my face. He said the only way I could afford a semi-detached house as a single person would be to save up £4,000. I said where is that going to come from? I was supporting my retired parents and didn’t have any money to spare,” Carmel told the RCN.

Luckily, the client was not easily put off, has connected with a specialist shared ownership broker and is in the process of applying for a deal.

An RCN spokesperson said: “We spoke to a range of members, and others didn’t say that they felt the same way, but brokers did point out that it would be difficult based on the income, and advised saving up more of a deposit.”

“That is very difficult for nurses who are single parents. The deposit they have can often be the product of years of hard graft and saving. To raise, say, and extra £4,000 that might make the application a bit easier, would be extremely difficult,” they added.

The purpose of the RCN’s research was to demonstrate to government the difficulties faced by nurses seeking to buy a home, and to bring pressure on policymakers to increase nurses’ salaries.

Pat Cullen, RCN general secretary and chief executive, said: “Communities in which nursing staff can’t afford to live are communities at risk of poor health and patient care.”

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